Murdered British hostage Ken Bigley tried to flee from his captors shortly before his death, according to reports.
A book of condolence is at Liverpool's Catholic cathedral
Iraqi government sources told the BBC's Caroline Hawley that Mr Bigley escaped briefly before being recaptured.
The 62-year-old engineer's family confirmed his death on Friday after a video was released showing him being beheaded.
A day of mourning has taken place in his home city of Liverpool and a two minutes silence was held at noon.
Mr Bigley is thought to have escaped for around half an hour, with the help of one of his captors.
He was recaptured in farmland near the town of Latifiya, south-west of Baghdad, the Reuters news agency said, quoting "insurgent sources".
"He never made it to the main street," one added.
Latifiya is in a lawless area and American and Iraqi forces have recently been attempting to regain control.
The Foreign Office refused to comment on the claims.
British diplomats in Baghdad are still trying to recover Mr Bigley's body.
The two minute silence was observed at noon in churches, cathedrals,
businesses and homes across Liverpool and by around 200 people who gathered in the shadow of the town hall.
It was followed by the ringing of the municipal bell 62 times - one for each
year of Mr Bigley's life.
Scores of people have also been writing personal messages in books of condolence and a minute's silence was observed before the England v Wales football match at Old Trafford.
Prime Minister Tony Blair spoke to Mr Bigley's family in Liverpool on Saturday night. There were no details about the conversation.
The Tawhid and Jihad group took Mr Bigley hostage along with two US colleagues in Baghdad on 16 September. It beheaded the Americans the following week.
Foreign Secretary Jack Straw revealed that a mystery intermediary was communicating with the group, led by Jordanian militant Abu Musab al-Zarqawi, in the days before Mr Bigley's death.
Mr Bigley's Thai-born wife Sombat, who is with her family in Bangkok, released a short statement through the British embassy.
She said: "No words can express the agony I feel for the loss of my
husband Ken. He was a good man and a loving, caring husband."
Mr Bigley's son Craig, 87-year-old mother Lil and brothers Philip, Stan and Paul had campaigned hard for his release.
Philip Bigley said they had experienced "three long weeks of waiting and three long weeks of agony".
The government had done all it could to secure Mr Bigley's release, he said, but his brother's fate may have been sealed "from day one".
The Queen and the prime minister have led tributes to the engineer, and Foreign Secretary Jack Straw visited Mr Bigley's family on Friday.
Mr Blair expressed his "utter revulsion" at the killing, while Iraq Prime Minister Iyad Allawi condemned it as a horrible, barbaric act.
A video released by the kidnappers showed six hooded, armed men standing behind Mr Bigley, who was on his knees, according to a witness who watched the video for the Reuters news agency.
One of the six spoke in Arabic for a minute.
He said the group would carry out "the sentence of execution against this hostage" because the British government "did not meet our demand" to release Iraqi women detained by the US-led command in Iraq.
He then took a knife from his belt and cut off Mr Bigley's head as three other militants held him down.
On Friday, Paul Bigley accused Mr Blair of having "blood on his hands".
His brother, Philip, thanked "those who have prayed for Ken and our family, from all religious backgrounds".
"He was a truly wonderful father, husband, brother and son. The loss to our family is immeasurable.
"The horror of these final days will haunt us for ever."
Muslim leaders in the UK have united in condemning the killing.
"This is a deed which is deeply repugnant and utterly reprehensible," said Muslim Council of Britain general secretary Iqbal Sacranie.
"We unequivocally condemn it and hope his murderers are brought to justice quickly."